Small firms are owed nearly £500 billion in outstanding invoices and the issue is worse in summer – so face up to the challenge now, a Lloyds Bank expert says.
Finance departments in firms across the country can be short-staffed due to holidays, delaying more payments and hitting creditors harder.
Stephen Everett, head of product and propositions, Global Transaction Banking at Lloyds Banking Group, urged firms to ensure all purchase order numbers in all correspondence were correct.
He added: “Cashflow forecasting is another must. Being on top of what money is coming in and what is going out will enable you to spot a late payment as soon as it occurs. Being able to promptly chase up a delayed invoice there and then is better than noticing it too late.
“Yet even with the world’s smoothest accounting procedures, a late payment can often be unavoidable.
“For ambitious businesses that do not want to be held back by arbitrary cashflow difficulties, or want the flexibility to deal with any short-term spikes in late payments, lending options such as invoice finance can provide that cashflow boost.
“Invoice finance works by effectively bringing in an intermediary to buy your unpaid client bills for a fee.”